WASHINGTON (CBSDC) — A recent study finds that American working households are trillions of dollars short of their target retirement savings.
The findings from the National Institute of Retirement Security show that American households, measured by retirement account balances, are $14 trillion short of their target retirement savings. When measured by net worth, households fall $6.8 trillion short.
Researchers highlighted that 38.3 million working-age households do not have any retirement account assets. A third of households that are nearing retirement have no assets saved, while another third have saved less than one times their income. The median savings balance of those near retirement is only $12,000.
“With limited retirement plan access and minimal retirement savings, majority of American households will not be able to maintain their standard of living after retirement, even if they work until age 67,” the institute states.
The institute finds three main policy implications on which to improve: strengthen Social Security, better access to work-related retirement plans for low- and middle-wage employees and help low-wage workers save better.
“Working families need help from employers and policymakers to improve retirement readiness,” the study says.
Researchers selected “age-specific multipliers” from Fidelity and compared four measures of household financial assets to benchmarks to show how much American households fell short by in their retirement savings.